Cleveland Clinic strengthening its global grip

Cleveland Clinic Abu Dhabi, a 364-bed hospital, opened in March 2015. The facility almost tripled its patient capacity in 2016.

Cleveland Clinic is cautiously optimistic that the system's new relationship with a group interested in building a hospital in China could develop into something more.

Invited by a "multinational group that has activities in several Asian countries," the Clinic agreed to serve in an advisory role, said Bill Peacock, the Clinic's chief of operations. For now, the Clinic is holding any further details on the early-stage partnership close to the vest.

"I think we're going to learn a lot, and I'm excited to see how it helps us project our future growth in international," he said.

The Clinic's link to the potential hospital in China is the latest example of the health system's efforts to make plays on the global health care stage.

Today, the $8 billion health care system, in addition to its expansive network stateside, boasts facilities in Canada, the United Arab Emirates and, soon enough, the United Kingdom. The Clinic's international conquest has been one of the hallmark achievements of Dr. Toby Cosgrove, who will step down as system CEO at year's end after 13 years in the role. Cosgrove's replacement, Dr. Tomislav "Tom" Mihaljevic, is now CEO of Cleveland Clinic Abu Dhabi — the health system's most ambitious international effort.

The Clinic's international portfolio, of course, is much more than bricks and mortar. The strategy is focused around five key areas: treatment of international patients, digital efforts like telehealth, advisory services like those in China, international hubs and education.

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The Clinic is converting a six-story office building in London into a 200-bed hospital that is expected to be up and running in three years.

"The world's always changing. Sometimes there's strife in one part of the world, or there may be economic issues or there may be immigration issues or things like that," Peacock said. "And as the world changes, the balance to that portfolio changes to some extent."

The Clinic's work abroad has helped the system elevate its brand, expand its service lines, reach more patients, grow new muscles and bring expertise and resources back to its main campus in Cleveland.

The Clinic, of course, isn't alone when it comes to its work abroad, though it may be one of the most active. Mayo Clinic, the Minnesota-based health system often viewed as the Clinic's fiercest competitor on the national stage, has referral offices in Colombia, Mexico and Ecuador. Through various sorts of arrangements, Pittsburgh-based UPMC has a presence in places such as Italy, Japan, Ireland and others.

Interest among health organizations in international expansion goes back about 15 to 20 years, said Zachary Hafner, a national partner of consulting at Advisory Board, a global health care consulting firm. Organizations, particularly those with strong brand names, can go into other countries, find new markets to commercialize their intellectual property and command a margin, he said.

In addition to care delivery, many are providing lab services, analytics, protocols, virtual products and more.

"I think some of these players are really taking a global perspective on how do they expand their influence in health care and how do they expand their reach to really commercialize intellectual property and capabilities that they've developed," Hafner said. "I don't know that it's quite so much about how do we create new care delivery capacity in other countries. There's some of that, but I don't think that's the overarching strategy. There's a lot of opportunities to expand into other markets domestically if that was all they were trying to accomplish."

Following the economic downturn in 2008, Hafner said the industry saw a bit of a retrenchment back to the United States and a focus on domestic work, but some — like the Clinic — have continued to push international work, realizing that to be influential in health care, they "have to have that influence not just in the United States, where 300 million of the 8 billion people on the planet live, but (they) have to be influential in other areas."

International intrigue

Though just one part of the Clinic's international strategy, the hubs — where the Clinic is directly responsible for providing care — are the most visible examples of work abroad.

It has been 10 years since the Clinic opened its first international hub with Cleveland Clinic Canada in downtown Toronto, focused on partnerships in the Toronto area.

Cleveland Clinic Abu Dhabi, a 364-bed multispecialty hospital offering critical and acute care services, opened in March 2015. Last year, it grew its outpatient services and almost tripled patient capacity, according to the Clinic. The hospital had more than 337,000 patient encounters in 2016.

Thanks to the clinical capability built there, the layer of Cleveland Clinic talent and culture, and the physicians brought in from around the word, the Abu Dhabi hospital has been "incredibly successful," Peacock said.

"We're being perceived as a regional center for medical innovation and education, and Cleveland's name is on everything we do there," he said. "So Cleveland Clinic is on the building, it's on every sign in the building, and it's on every lab coat of every doctor who performs care there."

Up next is Cleveland Clinic London, where the Clinic is converting a six-story, 198,000-square-foot building from an office space to a roughly 200-bed hospital. It received approval from local authorities in January 2017 to begin the work on the facility, which is slated to open in 2020.

A move into the United Kingdom is very specific to that environment, where the private sector is growing as an alternative option to the taxpayer-funded National Health Services system, said Mark Votruba, a professor at Case Western Reserve University who studies health economics.

The Clinic sees itself as potentially being a major player on the private side. But there's a risk behind that expansion, he said, as the economics of the public health care system won't necessarily remain the same.

"The private health care market in London and in England is somewhat dependent on how generous the national health services is funded," Votruba said. "If the British National Health Service suddenly became really well funded, that would put a damper on demand for private alternatives and that would leave the Cleveland Clinic in a potentially dangerous place."

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Cleveland Clinic Canada debuted in downtown Toronto in 2007.

But when global efforts are successful, Peacock said, it gives the system the opportunity to find other sources of revenue to reinvest in Cleveland and the Clinic. It grants the Clinic exposure to international talent, research, thinking, treatments and pharmaceuticals, which "only helps strengthen Cleveland Clinic and in turn, Cleveland as a powerhouse for delivering quality care and great outcomes."

Part of the Clinic's role as a major contributor to the local economy stems from its ability to bring people from outside the city and region to Cleveland to get their care, Votruba said. A system with that sort of national and international reputation is a "very powerful" boon for Cleveland.

"If expanding increases that brand and increases their reputation abroad, I think all those things are at least indirectly beneficial to the region," Votruba said.

Every week, the Clinic receives invitations to go somewhere in the world — often to build a new hospital, Peacock said. Obviously unable to accept every offer that comes across its plate, the Clinic carefully weighs each.

"For places like Cleveland Clinic, where their brand is synonymous with success and excellence and being able to achieve the impossible, any kind of failure is concerning," Hafner said. "I think that's probably the bigger risk than the financial risk associated with making the investment."

In a time when the health care industry faces tremendous change, a presence on the global stage helps the Clinic to think agilely, according to Peacock. The system is exposed to different payment mechanisms, legal and regulatory requirements, levels of government versus private insurer involvement, physician credentialing systems, education approaches and more, allowing the Clinic to understand things "much more than we would if we'd never poked our head outside of this particular area," Peacock said.

"And as we play in these different models, I think it helps us think about the models we may be having to operate in under a future U.S. health care system."